China’s $1.7 trillion hangover

China’s $1.7 trillion hangover

Up to 40% of China’s $1.7 trillion LGFV loans are at high risk of default. What’s a panicking Beijing to do?

EuromoneyFXNews.com

EuromoneyFXNews.com

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June 2009

Raters placed on negative watch


Markets must soon learn not to react to agency sabre-rattling.


Oh the irony of markets moving on a ratings action from Standard & Poor’s on the UK. Surely a lesson to be learnt from the credit crunch is that relying on ratings agencies for investment decisions is not the wisest course. Sterling fell, gilt yields rose and the sovereign CDS widened all as a result of S&P placing the UK’s triple A rating on negative.

This decision came on the back of no fresh information. The...


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